Question 1

If the government were to intervene and set the price of a dozen eggs above the market price, then we would expect, relative to the market outcome,

Accepted Answer

A)  an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell. 
B)  an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell. 
C)  a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell. 
D)  a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell. 
A)  an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell. 
B)  an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell. 
C)  a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell. 
D)  a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.

Question 2

A direct or positive relationship exists between a country's

Accepted Answer

A)  productivity and its standard of living. 
B)  amount of government spending and its productivity. 
C)  total population and its average citizen's income. 
D)  rate of population growth and the extent of its trade with other countries. 
A)  productivity and its standard of living. 
B)  amount of government spending and its productivity. 
C)  total population and its average citizen's income. 
D)  rate of population growth and the extent of its trade with other countries.

Question 3

The increase in living standards of American workers over the past century is primarily due to

Accepted Answer

A)  the success of labor unions. 
B)  minimum-wage laws. 
C)  improvements in productivity. 
D)  None of the above are correct. 
A)  the success of labor unions. 
B)  minimum-wage laws. 
C)  improvements in productivity. 
D)  None of the above are correct.

Question 4

Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, and $7,000 on books. If he does not go to college, he will earn $22,000 working at a construction job and he will spend $11,000 on room and board. Paul's cost of going to college is

Accepted Answer

A)  $96,000. 
B)  $110,000. 
C)  $114,000. 
D)  $123,000. 
A)  $96,000. 
B)  $110,000. 
C)  $114,000. 
D)  $123,000.

Question 5

Irregular fluctuations in economic activity are known as the

Accepted Answer

A)  business cycle. 
B)  broken window fallacy. 
C)  tradeoff between inflation and unemployment. 
D)  ten principles of economics. 
A)  business cycle. 
B)  broken window fallacy. 
C)  tradeoff between inflation and unemployment. 
D)  ten principles of economics.

Question 6

The economy of the former Soviet Union is best described as a

Accepted Answer

A)  primitive economy. 
B)  market economy. 
C)  hybrid economy. 
D)  centrally-planned economy. 
A)  primitive economy. 
B)  market economy. 
C)  hybrid economy. 
D)  centrally-planned economy.

Question 7

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

Accepted Answer

A)  People face tradeoffs. 
B)  The cost of something is what you give up to get it. 
C)  Rational people think at the margin. 
D)  People respond to incentives. 
A)  People face tradeoffs. 
B)  The cost of something is what you give up to get it. 
C)  Rational people think at the margin. 
D)  People respond to incentives.

Question 8

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following firms is most likely to have market power?

Accepted Answer

A)  a grocery store in a metropolitan area 
B)  a convenience store in a suburb 
C)  a pub in a college town 
D)  the only gasoline station in a rural area 
A)  a grocery store in a metropolitan area 
B)  a convenience store in a suburb 
C)  a pub in a college town 
D)  the only gasoline station in a rural area

Question 10

When a government program is justified not on its merits but on the number of jobs it will create,

Accepted Answer

A)  the program is an efficient use of taxpayer dollars. 
B)  it should be approved only if the unemployment rate is low. 
C)  taxes should be raised to fund the program. 
D)  it is known as the "broken window fallacy." 
A)  the program is an efficient use of taxpayer dollars. 
B)  it should be approved only if the unemployment rate is low. 
C)  taxes should be raised to fund the program. 
D)  it is known as the "broken window fallacy."

Question 11

The marginal benefit Kyra gets from eating a second sandwich is

Accepted Answer

A)  the total benefit Kyra gets from eating two sandwiches minus the total benefit she gets from eating one sandwich. 
B)  the same as the total benefit she gets from eating two sandwiches. 
C)  less than the marginal cost of eating the second sandwich since she chose to eat the second sandwich. 
D)  the total benefit Kyra gets from eating three sandwiches minus the total benefit she gets from eating two sandwiches. 
A)  the total benefit Kyra gets from eating two sandwiches minus the total benefit she gets from eating one sandwich. 
B)  the same as the total benefit she gets from eating two sandwiches. 
C)  less than the marginal cost of eating the second sandwich since she chose to eat the second sandwich. 
D)  the total benefit Kyra gets from eating three sandwiches minus the total benefit she gets from eating two sandwiches.

Question 12

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

Accepted Answer

The answer of Zack quits his job at a consulting...

Question 13

In the early 1920s,

Accepted Answer

A)  Germany experienced a very high rate of inflation. 
B)  the quantity of German money was declining rapidly. 
C)  the value of German money remained almost constant. 
D)  All of the above are correct. 
A)  Germany experienced a very high rate of inflation. 
B)  the quantity of German money was declining rapidly. 
C)  the value of German money remained almost constant. 
D)  All of the above are correct.

Question 14

Which of the following is an important cause of inflation in an economy?

Accepted Answer

A)  increases in productivity in the economy 
B)  the influence of positive externalities on the economy 
C)  lack of property rights in the economy 
D)  growth in the quantity of money in the economy 
A)  increases in productivity in the economy 
B)  the influence of positive externalities on the economy 
C)  lack of property rights in the economy 
D)  growth in the quantity of money in the economy

Question 15

Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $120, so she can only buy one. This illustrates the basic concept that

Accepted Answer

A)  trade can make everyone better off. 
B)  people face trade-offs. 
C)  rational people think at the margin. 
D)  decisions made at the margin are not particularly important. 
A)  trade can make everyone better off. 
B)  people face trade-offs. 
C)  rational people think at the margin. 
D)  decisions made at the margin are not particularly important.

Question 16

Government policies can change the costs and benefits that people face. Those policies have the potential to

Accepted Answer

A)  alter people's behavior. 
B)  alter people's decisions at the margin. 
C)  produce results that policymakers did not intend. 
D)  All of the above are correct. 
A)  alter people's behavior. 
B)  alter people's decisions at the margin. 
C)  produce results that policymakers did not intend. 
D)  All of the above are correct.

Question 17

What you give up to obtain an item is called your

Accepted Answer

A)  opportunity cost. 
B)  explicit cost. 
C)  monetary cost. 
D)  direct cost. 
A)  opportunity cost. 
B)  explicit cost. 
C)  monetary cost. 
D)  direct cost.

Question 18

The adage, "There is no such thing as a free lunch," means

Accepted Answer

A)  even people on welfare have to pay for food. 
B)  the cost of living is always increasing. 
C)  people face tradeoffs. 
D)  all costs are included in the price of a product. 
A)  even people on welfare have to pay for food. 
B)  the cost of living is always increasing. 
C)  people face tradeoffs. 
D)  all costs are included in the price of a product.

Question 19

How does the study of economics depend upon the phenomenon of scarcity?

Accepted Answer

Because economics is the study of how so

Question 20

When the government redistributes income from the wealthy to the poor,

Accepted Answer

A)  efficiency is improved, but equality is not. 
B)  both wealthy people and poor people benefit directly. 
C)  people work less and produce fewer goods and services. 
D)  the government collects more revenue in total. 
A)  efficiency is improved, but equality is not. 
B)  both wealthy people and poor people benefit directly. 
C)  people work less and produce fewer goods and services. 
D)  the government collects more revenue in total.

If the government were to intervene and set the price of a dozen eggs above the market price, then we would expect, relative to the market outcome,

A direct or positive relationship exists between a country's

The increase in living standards of American workers over the past century is primarily due to

Irregular fluctuations in economic activity are known as the

The economy of the former Soviet Union is best described as a

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

The cost of an action is measured in terms of foregone opportunities.

Which of the following firms is most likely to have market power?

When a government program is justified not on its merits but on the number of jobs it will create,

The marginal benefit Kyra gets from eating a second sandwich is

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

In the early 1920s,

Which of the following is an important cause of inflation in an economy?

Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $120, so she can only buy one. This illustrates the basic concept that

Government policies can change the costs and benefits that people face. Those policies have the potential to

What you give up to obtain an item is called your

The adage, "There is no such thing as a free lunch," means

How does the study of economics depend upon the phenomenon of scarcity?

When the government redistributes income from the wealthy to the poor,

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Exam 1: Ten Principles of Economics

If the government were to intervene and set the price of a dozen eggs above the market price, then we would expect, relative to the market outcome,

A direct or positive relationship exists between a country's

The increase in living standards of American workers over the past century is primarily due to

Irregular fluctuations in economic activity are known as the

The economy of the former Soviet Union is best described as a

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

The cost of an action is measured in terms of foregone opportunities.

Which of the following firms is most likely to have market power?

When a government program is justified not on its merits but on the number of jobs it will create,

The marginal benefit Kyra gets from eating a second sandwich is

Zack quits his job at a consulting firm, which pays $40,000 a year, to enroll in a two-year graduate program. His annual school expenses are $30,000 for tuition, $2,000 for books, and $600 for food. What is his opportunity cost of attending the two-year graduate program?

In the early 1920s,

Which of the following is an important cause of inflation in an economy?

Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $120, so she can only buy one. This illustrates the basic concept that

Government policies can change the costs and benefits that people face. Those policies have the potential to

What you give up to obtain an item is called your

The adage, "There is no such thing as a free lunch," means

How does the study of economics depend upon the phenomenon of scarcity?

When the government redistributes income from the wealthy to the poor,

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters